Correlation Between Corporacion Financiera and Mercal Inmuebles
Can any of the company-specific risk be diversified away by investing in both Corporacion Financiera and Mercal Inmuebles at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Corporacion Financiera and Mercal Inmuebles into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Corporacion Financiera Alba and Mercal Inmuebles Socimi, you can compare the effects of market volatilities on Corporacion Financiera and Mercal Inmuebles and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Corporacion Financiera with a short position of Mercal Inmuebles. Check out your portfolio center. Please also check ongoing floating volatility patterns of Corporacion Financiera and Mercal Inmuebles.
Diversification Opportunities for Corporacion Financiera and Mercal Inmuebles
-0.5 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Corporacion and Mercal is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding Corporacion Financiera Alba and Mercal Inmuebles Socimi in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mercal Inmuebles Socimi and Corporacion Financiera is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Corporacion Financiera Alba are associated (or correlated) with Mercal Inmuebles. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mercal Inmuebles Socimi has no effect on the direction of Corporacion Financiera i.e., Corporacion Financiera and Mercal Inmuebles go up and down completely randomly.
Pair Corralation between Corporacion Financiera and Mercal Inmuebles
Assuming the 90 days trading horizon Corporacion Financiera Alba is expected to under-perform the Mercal Inmuebles. But the stock apears to be less risky and, when comparing its historical volatility, Corporacion Financiera Alba is 1.79 times less risky than Mercal Inmuebles. The stock trades about -0.15 of its potential returns per unit of risk. The Mercal Inmuebles Socimi is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 4,460 in Mercal Inmuebles Socimi on August 28, 2024 and sell it today you would earn a total of 520.00 from holding Mercal Inmuebles Socimi or generate 11.66% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Corporacion Financiera Alba vs. Mercal Inmuebles Socimi
Performance |
| Timeline |
| Corporacion Financiera |
| Mercal Inmuebles Socimi |
Corporacion Financiera and Mercal Inmuebles Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Corporacion Financiera and Mercal Inmuebles
The main advantage of trading using opposite Corporacion Financiera and Mercal Inmuebles positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Corporacion Financiera position performs unexpectedly, Mercal Inmuebles can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Mercal Inmuebles will offset losses from the drop in Mercal Inmuebles' long position.| Corporacion Financiera vs. Banco de Sabadell | Corporacion Financiera vs. Banco Santander | Corporacion Financiera vs. Repsol |
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Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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